Correlation Between Advance United and Blue Star

Can any of the company-specific risk be diversified away by investing in both Advance United and Blue Star at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Advance United and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advance United Holdings and Blue Star Gold, you can compare the effects of market volatilities on Advance United and Blue Star and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Advance United with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance United and Blue Star.

Diversification Opportunities for Advance United and Blue Star

0.0

Correlation Coefficient

Advance United  Blue Star

Pay attention - limited upside

The 3 months correlation between Advance and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advance United Holdings and Blue Star Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Gold and Advance United is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Advance United Holdings are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Gold has no effect on the direction of Advance United i.e., Advance United and Blue Star go up and down completely randomly.

Pair Corralation between Advance United and Blue Star

If you would invest  14.00  in Blue Star Gold on March 13, 2024 and sell it today you would earn a total of  0.00  from holding Blue Star Gold or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Advance United Holdings  vs.  Blue Star Gold

Advance United Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advance United Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Advance United is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Blue Star Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Advance United and Blue Star

The main advantage of trading using opposite Advance United and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance United position performs unexpectedly, Blue Star can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blue Star will offset losses from the drop in Blue Star's long position.

The idea behind Advance United Holdings and Blue Star Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.